Transcript Document

How to manage global business at Kellogg’s
(with focus on people management)
H. Shin
September 22, 2006
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Introduction
Kellogg Company
Performance of Kellogg Company (2001 – 2006)
Global Alignment
Key Operating Principles – Volume to Value
Key Operating Principles – Manage for Cash
K Values
Kellogg’s HR/People Wheel
Linking Strategy to Structure & People
Linking Talent Management to Business Planning
Linking Employee Deliverables to Priorities
PMP Form
Kellogg Business Leader
Kellogg Business Leader
Continuous Talent Management Process
Introduction
Challenges to MNC’s
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Aligned Organization
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Talent Management
Kellogg Company
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Founded in 1906 in Battle Creek, Michigan
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Started international expansion in 1914
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Products : Cereal, cereal bars, cookies, crackers, toaster
pastries, frozen waffles, meat alternatives
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Kellogg products are manufactured in 17 countries and
marketed in more than 180 countries
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2005 Financials
NSV :
$10.2 Billion
Operating Profit : $1.8 Billion
Net earnings :
$1.0 Billion
Asset :
$10.6 Billion
Number of Employees : 26,000
Performance of Kellogg Company (2001 – 2006)
• Reported NSV growth (5 year CAGR) :
• Internal NSV growth (5 year CAGR) :
• Operating Profit growth (5 year CAGR) :
• Earnings Per Share (CAGR 2002 – 2005) :
+11% per year
+5% per year
+11% per year
+11% per year
Global Alignment
High Performance Organizations are Aligned
Purpose
To be the Food Company of Choice
Identity
We build GR-R-REAT brands and make the
world a little happier by bringing our best
to you.
Identity
Strategic Focus
Strategic Focus
• Grow Cereal
• Expand Snacks
• Pursue Selective External Growth
Strategic
Operating
Principles
Strategic
• Deliver Results
• Strengthen the Organization
• Create the Future
Values
Over Time,
Culture Drives Results.
Operating Principles
Values
Key Operating Principles – Volume to Value
Expand
Gross Profit
Margin
Grow
Net Sales
Increase
Brand
Building
Volume
to
Value
Improve
Mix
Drive
Innovation
Key Operating Principles – Volume to Value
Grow
Net Earnings
Increase
Return on
Invested
Capital
Reduce
Working
Capital
Manage
for
Cash
Improve
Financial
Flexibility
Prioritize
Capital
Expenditure
K Values
Kellogg’s HR/People Wheel
“To improve business results through people”
Create
A Winning Culture
Reward
and Recognize
Results
Invest
In
People
Select
the Right People for
the Right Job
 Creating a Winning Culture
 Writing Accountabilities
Develop
Talent
Improve
Performance
 Holding Performance Review
Discussions (setting
accountabilities and reviews)
 Taking Charge of Your
Development
 Guiding the Development of
Your Employees
Linking Strategy to structure & People
Strategy
Structure
People
Cascade
Template
Structure
Assessment
Workforce
Assessment
Results
Linking Kellogg strategy to the department’s strategy is an important
process. Structure and people must also be aligned to support WorldClass Execution.
Linking Talent Management to Business Planning
Jan
Goal
Setting/
Strategy
PMP
Career
Developmen
t
Succession
Managemen
t
Feb
Mar
Apr
May
Jun
July
Cascade
strategic
information
Create
accountabilities
Assess
competencies,
update EP/IDP
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Aug
Sept
Oct
Nov
Dec
Business Strategy
Planning
Discuss
comp &
previous
year perf
Review performance
to-date
Review development
to-date.
Incorporate SM
feedback
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3
BU/Area
Talent
Review
Global
Function
Talent
Review
EMC TR
and Org
Health
Check
3 employee/manager conversations
2 employee assessments
Assess and
rate
performance
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Linking Employee Deliverables to Kellogg's 2006 Priorities
2001-2003
2004-2006
Perform with the food
industry
The Kellogg
Strategy
2007-2010
Consistently perform with
the best of food industry
Consistently outperform
the best of food industry
Kellogg’s Purpose: To become the food stock of choice.
2006 Kellogg
Priorities
DELIVER RESULTS
• Focus on results for the current fiscal year
STRENGTHEN THE ORGANIZATION
• Focus on supporting work and programs that are just on
the “horizon” (beyond the current fiscal year … 12-36
months away)
CREATE THE FUTURE
• Focus on building an organization unit/company that is
ready for the future
• Frequently, this is work around building people capability
STRENGTHEN THE
ORGANIZATION
DELIVER RESULTS
Deliver on all budget commitments – NSV/CF/OP
Grow margins via continuous improvements in
price/mix/ innovation, cost reduction and efficiency
gains
Grow RTEC share
Strengthen U.S. Snacks and expand Snacks
worldwide
CREATE THE FUTURE
Continue our focus on Inclusion and Diversity to
better reflect our values and the consumers we
serve
Establish a worldwide talent management process
that is robust and complete to help develop our
people resources
Improve employee health and safety worldwide
Develop a stronger innovation pipeline
Build a results-driven culture focused on our
Values
Selectively review acquisitions/ alliances to support
our strategy
Carefully review selected geographic expansion
OU’s Purpose : To become the best operating food company in Asia
2006 Organization
Unit Priorities
& Imperatives
 Deliver on all budget commitments :
NSV/OP/CF
 Strengthen talent management process to
help develop our people resource
 Grow margins via continuous
improvements in mix, innovation & cost
reduction
 Continue to promote K- Values
 Accelerate the momentum built in
emerging markets such as India & Thailand
 Develop a stronger innovation pipeline
 Accelerate growth through developing
wholesome snacks business.
 Focus on Inclusion and Diversity
 Improve employee health and safety in
Asia
 Grow RTEC share in key markets
 Strengthen the equity of our core brands
 Strengthen and develop org to meet the
requirement for accelerated growth
 Establish the business model in China
Selectively review acquisitions / alliances
to support our strategy
OU Department: _________________________________
2006
Priorities for OU
Department:
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Employee: ___________________________________
2006
Accountabilities
for OU Employee
& Metrics
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Metrics
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Metrics
Metrics
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PMP Form
2006 Performance Management Form
Employee:
Manager:
2nd Level Manager:
Employee
Number:
Organization Unit:
PMP Assessment:
Self
Manager
Both the employee and manager play a role in completing this form. The PMP process begins when team goals have been set. The employee and manager then agree on
accountabilities and measures for the year. At the middle and end of the year, the employee completes a self-assessment. The manager incorporates the self-assessment and
stakeholder feedback into the final review of the employee. Signatures are obtained for accountabilities, mid-year review, and year-end review. The manager retains the final, signed
form, and submits a copy to the People Services Center (U.S. only).
 The What:
Delivering Results
Strengthening the Organization
Creating the Future
ACCOUNTABILITIES & MEASURES
MID-YEAR CHECK IN
YEAR-END REVIEW
What is the goal/deliverable? How will it be measured?
How is this employee tracking so far?
What are the employee’s results and impact?
People Managers Only: As a manager of people, you are
accountable to:
*Set 2006 team goals by (Date)
*Work with your employees to establish individual accountabilities
and IDPs by (Date)
*Conduct performance reviews for 2005 by Jan 2006
*Communicate final PMP ratings for 2005 by Mar. 13
*Conduct compensation discussions for 2005 by Mar. 13
*Conduct mid-year check-in and IDP reviews along with post-org
review feedback by (Date)
*Conduct informal and ongoing coaching and feedback sessions
throughout 2006
Diversity Focus (U.S.-based Managers Only): Execute Diversity
and Inclusion Strategy and communicate plan, which includes:
* Recruit, retain and develop talented people
* Drive understanding, education and awareness
* Create the environment
PMP Form
2006 Performance Management Form
 The How:
K Values
Acts with integrity and shows respect
Is passionate about our business, our
brands, and our food
Strives for simplicity
Is accountable
Has the humility and hunger to learn
Loves success
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Overall Rating
MID-YEAR CHECK IN
YEAR-END REVIEW
How is the employee’s behavior impacting results?
What should the employee stop, start, continue, or do differently?
In what ways did the employee’s behavior impact results and
contribution to the organization?
(This section is completed only at year-end. Only the manager determines the rating for the employee.)
Exceeded Expectations (A)
Met Expectations (B)
Did Not Meet Expectations (C)
No Rating (NR)
Consistently exceeded expectations and made a
distinctive and significant contribution to the
organization
Consistently met and sometimes
exceeded expectations and made the
expected contribution to the
organization
Fell short of expectations and/or failed to make
the expected contribution to the organization
Too new to the organization (i.e.,
less than three months as a Kellogg
employee) at the time ratings were
determined
Manager’s Summary Comments:
Role
Confirm
Employee’s Response:
Initial
Date
Confirm
Initial
Date
Confirm
Employee
Accountabilities
Mid-Year Review
Year-End
Review
Manager
Accountabilities
Mid-Year Review
Year-End
Review
2nd Level Manager
Accountabilities
N/A
N/A
Mid-Year Review
N/A
N/A
Year-End
Review
Initial
Date
Kellogg Business Leader
Creates Direction
Has strategic focus, has a broad, long-term perspective, drives innovative thinking, makes
the call, learns from experiences
Delivers Quarterly Results
Budgets, plans, proactively solves problems, identifies and shares opportunities and issues
Organizes To Win
Ensures that structure and processes can deliver for the overall success of Kellogg, drives
for clarity in roles and responsibilities, gets the right people in the right places
Drives Alignment
Creates a high performance work environment, communicates effectively, influences others,
develops relationships, collaborates with others to ensure the overall success of Kellogg
Invests in People
Sets accountabilities and communicates expectations, provides objective feedback, coaches,
measures performance, builds the bench
Inspires & Energizes People
Encourages, motivates, recognizes & rewards, walks the talk
Kellogg Business Leader
Career Categories
Lead
Executive
Competency Focus
Kellogg
Business
Leader
Model
Executive
Upper-Manager
Manager of People or Process
Individual Contributor
Functional/
Technical
Competencies
K Values
Continuous Talent Management Process
K Values Culture
Jan
Feb
Learn & share
company
priorities and
set employee
accountabilities
Performance
Management
Mar
Year-end
review and
compensation
discussion
Apr
May
Career Development
Succession
Management
Execution
Goal Setting &
People Planning
Jun
Jul
Aug
Sep
Oct
Mid-year Check
In re: employee’s
performance &
development
Engage in ongoing two-way conversation with employees throughout the year
Nov
Dec
Draft yearend
reviews
and ratings
Thank you!